Kazakh PM meets top Chevron execs after warning

Published: Friday, September 21, 2007, 17:38 [IST]

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ALMATY, Sept 21 (Reuters) Top Chevron executives met Kazakhstan's prime minister on Friday, praising the Central Asian state for its cooperation a day after the U.S. company came under pressure over its key oil project in the country.

The government said in a statement Karim Masimov and Chevron CEO Dave O'Reilly ''discussed development of Kazakh deposits'' and other energy issues during a meeting in the capital, Astana.

The brief statement said nothing about Thursday's proposal by a Kazakh parliamentarian, Gani Kasymov, to suspend Chevron's Tengizchevroil (TCO) venture developing the huge Tengiz oil deposit due to ecological violations.

There was no sign Kazakhstan would pursue the Chevron case, but Kasymov's remark rang alarm bells in the investors community in a country currently locked in a bitter dispute with a separate group of Western companies over another oilfield.

During the meeting, O'Reilly showered Masimov with praise, thanking the government for its support, according to the statement.

The Chevron boss made it clear that continuity of contracts was paramount for his company.

''Most importantly we are grateful for the stability of contracts and a strict adherence to all specified conditions,'' he was quoted as saying in the Russian language statement.

Masimov, in return, told O'Reilly that ''he highly regarded Chevron's work in Kazakhstan'', according to the statement.

Kazakhstan's recent assertiveness in its dealings with oil companies has put pressure on foreign investors, already wary in the wake of the government's bitter row with an Eni-led group developing another huge deposit, Kashagan.

The government says its dispute with the Eni is an isolated case stemming from the project's continuous start-up delays and cost overruns, and denies it is part of a wider campaign against foreign investors.

However, concerns rose again last week when Kazakh lawmakers started considering draft legislation that would allow the government to break the terms of contracts with oil investors.

The Eni-led AgipKCO consortium, which also includes Royal Dutch Shell, Exxon Mobil Corp and ConocoPhillips among others, has angered the government by pushing back the date the complex project might produce oil to the second half of 2010 from 2005 originally.